Mar 16, 2021 News, Webinars, CECL
The impact of CECL, or Current Expected Credit Losses, is not yet fully known, and the effect of the COVID-19 pandemic has further muddied the waters. In our upcoming webcast alongside global audit firm KPMG, we will be discussing the details of CECL and what potential effect this could have on your financial institution’s Allowance for Loan and Lease Losses (ALLL).
Register for our CECL webcast today!
What is CECL?
CECL is a new accounting standard update that was finalized back in 2016 by Financial Accounting Standards Board, or FASB for short. What CECL basically does is require lenders to provide an estimation of how much they expect in credit losses over the lifetime of a loan to better account for risk. Politicians pushed through CECL following the Great Recession of 2008-09. Many opine that regulations and policies treat the last crisis rather than the current one, but for now, CECL compliance is what we have to work toward.
Why are financial institutions worried?
Lending at community banks and credit unions could be seriously affected because of the additional reserve requirements. Credit unions in particular have been fighting for exemption from the CECL standard, including NCUA Chairman Rodney Hood, according to a Credit Union Times report. NAFCU has been emphasizing the angle that credit unions did not participate in the lending practices that led to the Great Recession and that credit unions do not have outside investors to provide credit loss exposure data to. Another point of concern noted by ALLL.com is that historical data needed for a CECL calculation may not be accessible or never been recorded at all.
Want to learn how to mitigate your CECL compliance requirements? Join our webinar!
When CECL compliance finally does go into full effect, both banks and credit unions will need to ready to follow the guidelines. That’s why Open Lending and KPMG are hosting a special webcast to inform you on everything your financial institution needs to know about CECL and what affect it will have on you! Register now and be sure to join us March 24 at 10 a.m. CDT!
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